The effects of low-carbon policies on net farm income
Concerns about expected increases in energy and other agricultural input costs have led some to oppose greenhouse gas cap-and-trade legislative proposals. However, these policies could result in significant revenue for U.S. agriculture, which is a potential source of low-carbon bioenergy and low-cost abatement alternatives to fossil fuel emission reductions (i.e., offsets) through terrestrial sequestration, afforestation, and reductions in nitrous oxide and methane emissions. It is important to simultaneously model these factors in order to properly assess the net impacts for U.S. agriculture. Existing studies of the impacts of low-carbon policies on the agricultural sector have generally not accounted for changes in production practices, demand responses, or commodity and offset revenues.